Wipro buys Yardley personal care businesses for $45.5 mn
Wipro, India's No. 3 software services exporter, said on Thursday it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business.
Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.
The transaction is expected to be completed by mid-December, it said in a statement.
Lornamead's global turnover is estimated to be close to $650 million. Its portfolio straddles various categories of personal care products including hair-care (Brisk, Aqua Net and Vosene), cosmetics and skin-care (Amplex and Handsan), oral care (Brilliant and Goldspot) and home care brand Stergene. Tura is a significant player in soaps and skin care in Nigeria, with an annual turnover of close to $50 million.
This is Wipro's second big buy-out in the FMCG space in two years. In July 2007, Wipro had acquired Singapore-based personal care products manufacturer Unza Holdings Ltd for $246 million (Rs 1,010.2 crore) in an all-cash deal. That deal with Unza's portfolio of shampoos, creams, lotions and detergents had marked Wipro's big plunge into the global FMCG space.
At the time of the deal, Unza had revenues of Rs 683.3 crore for the year ended April 2007. Unza's portfolio includes the brands Enchanteur, Safi, Romano, Izzi and detergent brands such as Vigor and Maxkleen. Wipro had funded the Unza acquisition through internal accruals and the deal had allowed the Azim Premji-led firm to get a foothold in Malaysia, Indonesia and Vietnam. Wipro is yet to leverage the potential of these brands in India.
Wipro's flagship brand in India, Santoor, is among the country's top four soap brands, the other's being Hindustan Unilever's Lifebuoy and Lux, and Reckitt Benckiser's Dettol. According to market researcher AC Nielsen's value numbers for soaps, for the 12-month period from June 2008 to June 2009, Santoor was the No. 3 soap brand in the country with a 7.6% market share. Santoor's niche as a sandalwood-based soap has helped it stave off competition.
For the quarter ended June 30 2009, Wipro Consumer Care & Lighting posted revenues of Rs 546 crore. The consumer care & lighting arm accounted for 9% of Wipro Ltd's total revenues for the quarter ended June 30, 2009.
Wipro's Unza buy was one of the largest overseas deal in the personal care segment by an Indian company. Late last year, Dabur had acquired 72.15% in Fem Care Pharma for Rs 203.7 crore in an all-cash deal. And in July this year, healthcare company Wockhardt sold its nutrition business to Abbot for about $130 million (Rs 625 crore). Abbot had acquired infant care brands Farex, Dexolac and adult protein supplement Protinex.
Most FMCG companies are looking at foreign buys in emerging markets like Africa, West Asia and CIS countries because such buyouts give them captive market share. Moreover, there are very few brands up for sale in India.
POSTED BY:
ASIM SINGHAL
PGDM IIIrd